Telemarketing Fraud

Many legitimate companies use the telephone to solicit business, and telemarketing has become a widely used and sophisticated sales tool. Unfortunately, swindlers also use this successful marketing technique. Some con artists operate “boiler rooms” full of telephone sales people who contact businesses with fraudulent offers for goods and services. These swindlers use prepared scripts and high pressure tactics to sell a wide variety of worthless or overvalued goods and services, such as:

Advertising space in business directories which do not exist.

Bargain” vacation packages or trips that are never provided.

Inferior office supplies, such as copy machine paper and toner.

Advertising specialty items, such as pens and key chains, that turn out to be totally different from what you’re told you’ll get.

If you agree to purchase, you will frequently be asked for your credit card number. Often, you will receive an invoice in the mail. When you pay, you are branded a “mooch,” and this almost guarantees you will receive additional telephone pitches.

You can protect your company by following a few simple rules:

Don’t buy from new suppliers without verifying their existence and reliability, particularly when contacted by telephone.

Don’t pay for advertising space in a business directory or other publication which is unknown to you. Be especially wary if the phone solicitor refuses to give you information about the publication and its advertisers, which you can verify.

Be wary of exaggerated claims for services, products, or prices. Con artists use come-ons such as “free gift”, “customer in your area went out of business” and “don’t worry about overdue notice.”

Don’t give out any information about your office machines over the phone unless you know who you’re talking to. Otherwise, you’ll be targeted to buy inferior quality supplies for your machines.

Ask for samples of advertising specialty items before you buy.

Never give your credit card number (or even just its expiration date) over the phone to a caller you are not familiar with and have not dealt with satisfactorily before.

Establish effective internal controls, channel all bills and invoices through one department, and verify all billing authorizations.

Don’t pay until an invoice is verified against goods or services actually ordered and received.

If you have been bilked by a boiler room scheme where the U.S. Mail system was used, or if you know about a scheme which should be investigated, inform your local postmaster or the nearest postal inspector.